Students Hear the Somber Stories of Inside Traders

The true stories of two young business lawyers who succumbed to the temptation of insider trading held the rapt attention of the audience. Keynote speaker Mary L. O’Connor recounted their downfalls at the recent induction ceremony of the UT Dallas School of Management’s chapter of Beta Gamma Sigma, the international business honor society.

What made her account particularly compelling is that O’Connor, also a lawyer, had personally crossed the paths of both men, as she said, “before their names hit the headlines.”

“Be leaders within your business and communities who don’t simply recite the organization’s core values or code of conduct but who set an example that will help others make the right choices.”

Mary L. O'Connor

One she had known as a classmate at Stanford Law School. The other once served as a summer law clerk at the Dallas office of Akin Gump, where she is a partner. Both men subsequently moved to New York, where they tried to profit from business information that their firms held in confidence. Caught, convicted, sentenced to probation and more for their crimes, each ultimately left a legal career he had worked hard to attain—as O’Connor put it—“in shambles.”

Her story came at what has become an annual School of Management event, a gathering to welcome new initiates into the honor society serving business programs accredited by AACSB International—The Association to Advance Collegiate Schools of Business. Students ranking in the top 10 percent of the baccalaureate and top 20 percent of graduate programs earn invitations to membership. In all, the School of Management welcomed 115 new members at the April 7 ceremony: 20 juniors, 28 seniors and 66 MBA and other master’s degree candidates.

O’Connor, a veteran of more than 20 years of business litigation, also was an honorary inductee into the group, whose three Greek letters, Beta Gamma Sigma, stand for honor, wisdom and earnestness.

Her address often touched on guiding principles such as those as she examined the stories of her acquaintances in more depth.

Andrew Solomon, her law school classmate, was one of the “Yuppie Five,” she said, a group of young professionals in the late 1980s caught and convicted of trying to profit from confidential information about a pending merger.

A decade later, Craig Spradling, Ms. O’Connor said, “ordered options on a company that was the target of a takeover being handled by the law firm” in New York where he had gone to work after clerking for Akin Gump.

“So, what went wrong?” she asked. “Were they not paying attention in class? Did they just not get it? Or were they simply bad people?”

Noting that at the sentencing of one of the men, his lawyer had said he had been motivated by greed, O’Connor observed: “[T]hat simple answer—that the crime resulted from moral failing—is one we often accept without looking deeper.”

In going deeper herself, she found an article that said that although lawyers are trained to serve justice and to hold to high standards of ethical behavior, the author suggested “that in the workplace they are subject to the same types of rationalization and ‘go along to get along’ behaviors as anyone else.”

The “larger point—that everyday imperatives in the workplace can cause even people who have strong groundings in law and ethics to engage in unethical and even illegal conduct—should give each of us pause,” O’Connor said.

She closed by encouraging her fellow inductees to stay in touch with the principles of Beta Gamma Sigma and to find resources to help them stay rooted in worthwhile values.

She advised fellow inductees to:

“Stay close to your family; think often of what they would expect you to do in any given situation.

Form networks of people who share your values, and nurture relationships outside your workplace that can serve as a sounding board for you.

“Be leaders within your business and communities who don’t simply recite the organization’s core values or code of conduct but who set an example that will help others make the right choices.”

School of Management Assistant Dean Monica Powell, president of the UT Dallas chapter of Beta Gamma Sigma, said O’Connor “gave a great speech at a great event. It was nice to reward the hard work of so many students with membership in an organization that embodies strong virtues and will be there to support them as they go forward.”

“It was even better, “Dr. Powell added, “that Mary O’Connor grounded them in the reality of what can happen, yet left them with words of inspiration couched as really practical, sound advice.”